JPMorgan has agreed to pay a record $13 billion to settle federal and state civil claims arising out of its packaging, selling, marketing and issuance of residential mortgage-backed securities, the Department of Justice announced Tuesday.

JPMorgan admitted that it made serious misrepresentations to the public about RMBS transactions made prior to Jan. 1, 2009, including that the mortgage loans in various securities complied with underwriting guidelines. In fact, employees knew that the loans were not appropriate for securitization, but allowed the loans to be securitized and then sold without disclosing this information to investors.

These transactions by JPMorgan and other banks contributed to the financial crisis, according to the DOJ.

The settlement is the largest settlement with a single entity in American history. Of the $13 billion, $9 billion will be paid to settle state and federal claims related to RMBS. The remaining $4 billion will go to relief for consumers harmed by the conduct of JPMorgan, Bear Stearns and Washington Mutual, which includes loan modification and efforts to reduce blight.

JPMorgan assumed significant assets of Washington Mutual Bank, which is why it is being held responsible for the conduct of that bank.

U.S. Attorney General Eric Holder and the state attorneys general who worked on the Financial Fraud Enforcement Task Force’s RMBS Working Group lauded the settlement.

“Without a doubt, the conduct uncovered in this investigation helped sow the seeds of the mortgage meltdown,” said Attorney General Eric Holder. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior. The size and scope of this resolution should send a clear signal that the Justice Department’s financial fraud investigations are far from over. No firm, no matter how profitable, is above the law, and the passage of time is no shield from accountability.”